Justice Department Announces Four Pleas In Internet Music Piracy Crackdown

First Guilty Pleas by Members of Pre-Release Music Groups from Operation FastLink

WASHINGTON, D.C.— The first guilty pleas involving members of pre-release music
piracy groups from Operation FastLink, a major Department of Justice initiative
against online piracy worldwide, were announced today by Assistant Attorney
General Alice S. Fisher of the U.S. Justice Department’s Criminal Division and
U.S. Attorney Paul J. McNulty of the Eastern District of Virginia. Derek A.
Borchardt, age 21, of Charlotte, North Carolina; Matthew B. Howard, age 24, of
Longmont, Colorado; and Aaron O. Jones, age 31, of Hillsboro, Oregon, each pled
guilty today to one count of conspiracy to commit copyright infringement for
their involvement in the pre-release music group “Apocalypse Crew” or “APC.”
George S. Hayes, age 31, of Danville, Virginia, previously pled guilty to one
count of criminal copyright infringement related to his involvement in another
pre-release music group called “Chromance” or “CHR.”

The three conspiracy pleas were entered before United States District Judge
Claude M. Hilton this morning. Sentencing for the three co-conspirators is
scheduled for May 19, 2006 at 9:00 AM. The fourth plea of George Hayes was
previously entered before United States District Judge Leonie M. Brinkema on
February 13, 2006. Sentencing for Hayes is scheduled for May 19, 2006 at 10:00
AM. Each of the four defendants face up to five years of imprisonment, a fine
of $250,000, and three years of supervised release.

These are the first federal criminal convictions of members of pre-release music
groups from Operation FastLink, an ongoing federal crackdown against the
organized piracy groups responsible for most of the initial illegal
distribution of copyrighted movies, software, games and music on the Internet.
Operation FastLink has resulted, to date, in more than 120 search warrants
executed in 12 countries; the confiscation of hundreds of computers and illegal
online distribution hubs; and the removal of more than 50 million dollars worth
of illegally-copied copyrighted software, games, movies, and music from illicit
distribution channels. As of today, Operation FastLink has yielded felony
convictions for 27 individuals. Operation FastLink is the culmination of
multiple FBI undercover investigations including an investigation into
pre-release music groups led by FBI agents from the Washington Field Office
(WFO). These are the first convictions to arise from the FBI-WFO
investigation.

“By stealing the creative product of talented people, this form of piracy
deprives artists of the rewards they deserve,” said U.S. Attorney McNulty. “If
left unchecked, such crime would drain the incentive to create that enriches our
lives.”

The defendants convicted today were leading members of pre-release music groups.
As detailed in the statements of facts filed with the four plea agreements,
these individuals were active members of pre-release groups; that is, groups
that acted as "first-providers" of copyrighted works to the Internet – the
so-called "release" groups that are the original sources for a majority of the
pirated works distributed and downloaded via the Internet.

As leading members of the pre-release music groups Apocalypse Crew and
Chromance, these defendants sought to acquire digital copies of songs and
albums before their commercial release in the United States. The supply of
pre-release music was often provided by music industry insiders, such as radio
DJs, employees of music magazine publishers, or workers at compact disc
manufacturing plants and retailers, who frequently receive advance copies of
music prior to its commercial release. Once a group prepared a stolen work for
distribution, the material was distributed in minutes to secure computer servers
throughout the world. From there, within a matter of hours, the pirated works
are distributed globally, filtering down to peer-to-peer and other public file
sharing networks accessible to anyone with Internet access and potentially
appearing for sale around the world.

The Recording Industry Association of America (“RIAA”) and several of its member
companies provided substantial assistance to the FBI in its investigation of the
pre-release music scene. RIAA is the trade group that represents the U.S.
recording industry; RIAA members create, manufacture, and/or distribute
approximately 90% of all legitimate sound recordings produced and sold in the
United States.

Jay V. Prabhu, trial attorney for the U.S. Justice Department’s Computer Crime
and Intellectual Property Section and currently a Special Assistant U.S.
Attorney in the Eastern District of Virginia, prosecuted the case on behalf of
the government.